GoPro’s Wall Street Honeymoon Just Keeps On Going

GoPro Inc. shareholders have had plenty to smile about since the company’s trading debut last week.

Shares have posted double-digit gains all four days the company has traded on the public markets, including an increase of as much as 23% on Tuesday. The stock traded as high as $49.90, more than double the $24 IPO price. The company currently has a market cap just shy of $5 billion, according to FactSet.

GoPro makes a wearable high-definition video recorder that initially appealed to people who ski, surf, scuba dive, bike and climb as a way to record and share their exploits. But it has also broadened its appeal and is now the top-selling camcorder in the world by volume, according to market researcher IDC. It generated about $1 billion in revenue last year and about $60 million in profit.

It isn’t unheard of for an IPO to double in such a short amount of time. Since 2010, there have been 13 companies whose stock prices surged more than 100% on the day they went public, according to Dealogic, which tracked U.S.-listed IPOs of more than $10 million.

Generally, an IPO that experiences such a sharp rally won’t keep rallying in the days after the initial pop. In GoPro’s case, the opposite has played out. The stock surged 31% in its debut on Thursday, 14% on Friday and 13% on Monday. The rally continued to gain steam on Tuesday.

The surging stock price underscores the rise of a new breed of high-end consumer-electronics gear such as the Sonos home speaker system and the Jawbone fitness tracker, which are bucking the reputation of hardware businesses as dull. But questions also remain about GoPro’s future and how investors should value the firm. Is it a gadget maker, a lifestyle brand, a social-media firm, or all of the above? How investors answer that question will help determine what kind of valuation the company should have.

For now, at least, investors are taking a very optimistic view on this company’s prospects.